Key facts
- IMF warns fiscal adjustment has stalled in many Latin American countries.
- Regional growth forecast for Latin America and the Caribbean is 2.3% in 2026 and 2.5% in 2027.
- Public debt continues to rise in the region, with favorable financing conditions potentially not lasting.
The International Monetary Fund urged Latin American governments on Friday, October 11, 2024, to leverage favorable global conditions to reduce public debt and enhance productivity, warning that fiscal consolidation efforts have stalled in many nations. The IMF's Regional Economic Outlook projects growth for the Western Hemisphere, including the U.S. and Canada, at 2.2% in 2025, decelerating slightly to 2.3% in 2027. For Latin America and the Caribbean specifically, growth is estimated at 2.3% in 2026 and 2.5% in 2027, marking a downward revision from July forecasts. Nigel Chalk, head of the IMF's Western Hemisphere Department, noted that public debt is increasing across the region and favorable financing conditions may not persist. While strong U.S. demand, high commodity prices, and robust tourism and remittances support economic activity, they do not address the core issues of high public debt and sluggish productivity growth. The IMF anticipates that few Latin American countries will significantly narrow the gap with advanced economies' living standards in the coming years, deeming this risk an urgent problem.